What is the compound interest formula?

For discrete compounding, the formula is A = P(1 + r/n)^(nt), where P is the principal, r is the annual rate as a decimal, n is the number of compounding periods per year, and t is the time in years. When monthly contributions are included, each contribution is compounded from the time it is made, which this calculator handles via a month-by-month simulation loop for precision.

How does continuous compounding work?

Continuous compounding treats interest as accruing at every instant. The formula is A = Pe^(rt). In practice, the difference between daily compounding and continuous compounding is very small for typical rates and time horizons. This calculator uses Pe^(rt) for the principal and adds monthly contributions using a continuous accrual factor for each month.

How much does compounding frequency matter?

More frequent compounding yields a higher effective annual rate. For example, 6% compounded monthly has an effective annual rate of about 6.17%, versus exactly 6% compounded annually. The gap grows with the rate and time horizon, but for typical savings rates (under 10%) the practical difference between monthly and daily compounding is less than 0.1% per year.

What does the growth multiplier (x) represent?

The growth multiplier shows how many times larger your final balance is compared to your total contributions (principal plus all monthly deposits). A multiplier of 2.5x means you end up with two-and-a-half times what you put in. It is a quick way to see the power of compounding regardless of the dollar amounts involved.

Are taxes and inflation factored in?

No. This calculator shows nominal (before-tax, before-inflation) growth. In a taxable account, investment gains are subject to capital gains or income tax depending on the account type and jurisdiction. To estimate real (inflation-adjusted) purchasing power, subtract the expected annual inflation rate from your nominal rate before running the calculation.

Compound Interest Calculator

Name: Compound Interest Calculator
Availability: InStock
Author: Nham Vu

Enter principal, rate, time, and compounding frequency to see your future balance, total interest, and year-by-year growth.

Investment Details

Currency Symbol

Principal

Annual Interest Rate

Time Period (Years)

Compounding Frequency

Optional

Monthly Contribution

Fill in your investment details and click Calculate

Results and year-by-year table will appear here

Final Balance

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Total Contributions

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Interest Earned

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Growth

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Year-by-Year Breakdown

All years

Year	Start Balance	Contributions	Interest	End Balance

Summary

Enter principal, rate, time, and compounding frequency to see your future balance, total interest, and year-by-year growth.

How it works

Enter the starting principal amount — the initial lump sum you are investing or saving.
Enter the annual interest rate as a percentage (for example, 7 for 7%).
Set the number of years you want to project the investment.
Choose how often interest compounds: annually, semi-annually, quarterly, monthly, daily, or continuously.
Optionally enter a monthly contribution to see how regular deposits accelerate growth, then review the final balance, total interest earned, and year-by-year breakdown table.

Use cases

A young investor modeling how $10,000 invested today grows over 30 years at 8% compounded monthly, with $200 added each month.
A parent calculating how much a college savings account will be worth by the time their newborn turns 18, given a fixed annual contribution.
A personal finance student comparing the difference between annual, monthly, and daily compounding on the same principal and rate.
A retiree projecting how long a lump-sum nest egg will grow at a conservative 4% rate before withdrawals begin.

Frequently Asked Questions

Last updated: 2026-06-09 · Reviewed by Nham Vu